Thread by @ReformedTrader

1/ Street Smarts: Adventures on the Road and in the Markets (Jim Rogers)

"History teaches us that appears undisputed today will look very different tomorrow. The most stable and predictable societies have undergone major upheavals. " (p. 29)

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2/ "The Austro-Hungarian empire, the glittering jewel of central Europe, was a vast, international center of wealth in 1914. The Vienna stock exchange at the time had something like four thousand members. Within four years, the Austro-Hungarian empire disappeared.

3/ "Pick any year you want, and then move forward ten or fifteen years. Take 1925, when again widespread peace, prosperity, and stability prevailed. How did things look in 1935? In 1940?

4/ "Pick the first year of any decade in the past fifty years, 1960, 1970, all the way through to the millennium. The conventional wisdom that existed at the start of each decade was shattered over the following ten or fifteen years." (p. 29)

5/ "Work experience teaches the value of money and helps you develop an identity. Manage finances gives you autonomy. A Columbia business school dean, citing a study, told me that single most important predictor of a happy adult life was having a paying job as a teenager." (p. 9)

6/ "The senior partner at Dominick and Dominick said, 'Business school will teach you nothing useful. Come down here and sell soybeans short, once, and you will learn much more about markets than you will wasting two years with them." (p. 12)

7/ "The current bull market in commodities began in 1999. We are fourteen years into it as of this writing. Like all bull markets, it will end in a bubble. When, at cocktail parties, people are telling you how much money they made in soybeans, it will be time to get out." (p. 28)

8/ "The study of philosophy and history were indispensable to me as an investor. You must know yourself better if you want to accomplish anything in life - you must learn to think at a deeper, more profound level if you want to understand the truth.

9/ "Studying philosophy helped me to think for myself, to think outside the established framework. It taught me to examine things independently, to examine every concept and every 'fact.' It taught me to think around corners, to see what is missing.

10/ "Many people today are caught up in conventional thinking because it is easier and safer to echo perceived wisdom, to echo the opinion of the majority. To think differently from others is difficult. Philosophy teaches you to think, and in doing so, it teaches you to doubt."

11/ Related reading:

Historical examples of bad calls and groupthink

https://twitter.com/ReformedTrader/status/1316380442765914115

In Defense of Troublemakers: The Power of Dissent in Life and Business

https://twitter.com/ReformedTrader/status/1368396960688869381

The Art of Non-Conformity

https://twitter.com/ReformedTrader/status/1359217542116462592

12/ "The excitement of Wall Street is that things are always changing. Every day, they move the pieces on you - somebody dies, there is a strike or a war, or weather conditions have shifted.

"Investing lacks the rhythm of other endeavors; it never stops testing you.

13/ "If you design a car, there is a predictable period of time in which you produce/sell the car, and the market will either accept it or reject it, but the project has a life span.

"With investing, nothing stops moving. It's a continual challenge: a game, a battle." (p. 35)

14/ "To succeed, be extremely curious. Who knows, when you pick up a rock, what might crawl out?

"Be skeptical. Most of what you are told is inaccurate, reflecting a lack of knowledge or a distortion of information, whether on the part of a government, company, or individual.

15/ "Don't take anybody's word for anything. Research everything yourself. Tap every source.

"A hundred people can walk into a room and hear the same information at the same time, but only 3% to 4% of them are going to come out of there and make the right judgment." (pp. 36-37)

16/ "When I started on Wall Street, very few people invested in stocks. As late as the 1960s, individual and institutional investors, such as pension plans and endowments, invested chiefly in bonds. (Currencies and commodities? Few on Wall Street could even spell those words.)

17/ "It is inconceivable to today's MBAs that common stocks were an uncommon investment only a few decades ago. But not until the bull market started in the 1980s did things change in a big way." (p. 37)

18/ "I remember talking about investing in the Danish krone and the people around me not having a clue. The smart, experienced older guys were just dumbfounded. It seemed as though they did not know where Denmark was, much less that it presented an opportunity." (p. 39)

19/ "Before asking how much you are going to get paid for a job, first decide whether it is the right job, whether it is the right place for you, because if it is the right place and you do the job right, the money will come. Money should be the least of your questions." (p. 42)

20/ "I went to see the chairman of Helmerich & Payne. He said, 'Listen, this is a terrible business. I just want to alert you. I am here, this is my family company, and obviously I am not going to leave, but you really should not be investing in this business.'

21/ "He explained the downturn as something beyond the company's control: there had been a long decline in the number of rigs because drilling had not been profitable.

"That just excited me more. Everywhere I went, I saw supplies drying up. We invested in all of it." (p. 45)

22/ "Do not worry about failure or mistakes. It is good to lose money, to go broke at least once, and preferably twice. But do it early in your career. It is better to go bust when you are talking about $20,000 than $20 million. Do it early, and it is not the end of the world.

23/ "Losing everything can be a beneficial experience, because it teaches you how much you do not know. And if you can come back from a failure or two, chances are that you care going to be more successful in the long run." (p. 55)

24/ "You've made ten times your money; then you decide to sell. That is a very dangerous time because you think you are really smart; you think you know investing is an easy game.

"Open your curtains, look out the window, go to the beach, do anything but think about investing...

25/ "That is when you are most vulnerable. You think: I have to do it again. This is so easy.

"Most successful investors do nothing most of the time. Do not confuse movement with action. Know when to wait. I do not change positions much, as I invest in secular trends." (pp.58-9)

26/ ""Why get up at 8:00 A.M. to drag yourself to Spanish class three days a week when you can learn more efficiently and on your own schedule via computer? Does America need thirty thousand expensive, tenured Spanish professors?

27/ "Is the Spanish professor at Princeton going to teach you Spanish better than anybody else? You can learn Spanish a lot faster, probably better, and certainly for a lot less money, by going online. Likewise with accounting, physics, and calculus." (p. 79)

28/ "The black market is indispensable to one's insight into a country. You know right away if there is a black market, and if so, whether the currency carries a premium to the official rate. If the premium is large, you know something is seriously wrong" (p. 88)

29/ "America is borrowing money to pay for military hardware that sits and rusts in the sun. The man who manufactures it makes money, but after that, there is no beneficiary. The investment does not represent an ongoing source of production the way a canal or a railroad does.

30/ "Today, we spent our borrowed money on transfer payments (over 60% of government spending and more than all government revenue). People who get the payments have a wonderful time, but such payments do nothing for future productivity.

31/ "If, as a nation, we are consuming instead of investing and saving, the borrowed money does little good.

"The people we have entrusted to address the problem (too much consumption and debt) have decided that the solution lies in yet more consumption and more debt." (p. 118)

32/ "I was short Citibank, all the investment banks, homebuilders, and Fannie Mae in 2008. The incompetence in Washington and on Wall Street was good to people like me. While countless Americans were watching their life savings evaporate, the skeptical investor gained." (p. 119)

33/ "In the early 1990s, Japan experienced a big bubble in real estate and stocks. When I was traveling through the country by motorcycle on my first trip around the world, the price of a country club membership in Japan exceeded the price of a house.

34/ "It was awe-inspiring what people in Japan were willing to pay to play golf. The bubble eventually popped, and everything collapsed. When I passed through Japan on my second trip around the world ten years later, its suicide rate was higher than that of any developed country.

35/ "Everyone was despondent, looking for security. Government jobs were highly sought after. The Japanese referred to the 1990s as 'the lost decade.'

"Now the lost decade has become two. Over 20 years later, the Japanese stock market is 75% below where it was in 1990." (p. 132)

36/ "People (bankers, clergymen, academics, politicians) get greedy, especially when times are exceptionally good. People cut corners that they might not under normal conditions. Because there is so much prosperity, they are not held to account. Stocks go up. Investments pay off.

37/ "Cutting corners can even make a lot of money. No one questions, or even cares, what happened - they are happy with their profits.

"Manias cover over a multitude of sins.

" 'You only find out who is swimming naked when the tide goes out,' says Warren Buffett." (pp. 136)

38/ "The spark igniting unrest is not necessarily political so much as it is economic: surging inflation, high unemployment, and an escalating cost of living, most significantly a rise in food prices. These are the things that make people deeply angry.

39/ "The Tiananmen Square protests in Beijing in the spring of 1989 started out as protests against inflation and rising prices. Not until the Western press showed up did students start shouting words like "democracy." (p. 209)

40/ " 'Let not him who is houseless pull down the house of another,' said Abraham Lincoln, 'but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built." (p. 211)

41/ "North Korea is about to open up. When it does, it will be a formidable player on the world stage. The Chinese are already pouring in. Up in the northwest, they are building new bridges connecting the two countries. There are new trade zones up there. So change is happening.

42/ "Everywhere we went, we saw propaganda posers calling for 'one country, two systems,' the prevailing mantra in the late 1990s when Hong Kong went back to China. The country seems to be keen for unification. A unified Korea would be an economic powerhouse." (pp. 228)

43/ "The successful countries of the world do not tax savings and investment. They encourage their citizens to save and invest. They tax consumption. In America we do the opposite; we encourage consumption. Any interest we pay is tax-deductible.

44/ "The tax system has grown so byzantine that Americans, according to the IRS, spend an estimated 6.6 billion hours a year filling out tax forms. The annual cost of compliance to individuals, corporations, and nonprofits is between three and four hundred billion dollars.

45/ "Change the tax system, change the education system, institute health-care and litigation reform, and bring the troops home... is that going to happen? The way the world has evolved, most governments, including our own, are dominated and controlled by special interests.

46/ "These interests and their lobbyists are entrenched around the existing system. None of these changes can happen the way government works today.

"In 1789 when the government was established, there were no telephones, mail was slow, and videoconferencing was unimaginable.

47/ "So we set up government in one place where our representatives could meet. If we were setting up in 2015, we would do it over the Internet. There is no reason for everyone to travel to Washington, a gigantic bureaucracy surrounded and controlled by lobbyists." (pp. 240-1)